A teachable moment: Pandemic changes to the state administrative hearing process

The state Capitol is flanked by the Ottaway Building, home of the Michigan Office of Administrative Hearings. Photo by Sarah Lawrence Brown | State Bar of Michigan

by Suzanne Sonneborn   |   Michigan Bar Journal

Much has been written about how the world has radically changed in the past year, including the practice of law.1 “From informal fact-gathering as part of a lawyer’s pre-suit diligence all the way through closing arguments at trial, one would be hard-pressed to find an aspect of modern litigation practice that has not been touched, and altered, by COVID-19.”2 The same may be said regarding the administrative hearing process managed by the Michigan Office of Administrative Hearings and Rules (MOAHR).

Created by Executive Order No. 2019-06 and modified by Executive Order No. 2019-13, MOAHR is an agency housed within the Michigan Department of Licensing and Regulatory Affairs with the core organizational mission of conducting administrative hearings and aiding in the promulgation of rules by providing a timely, professional, sound, impartial, and respectful process consistent with all legal requirements for all hearing participants and for all departments and agencies engaged in the rulemaking process.3

As a centralized administrative hearing system, the portfolio of case types adjudicated by MOAHR’s administrative law judges is extensive and comprised of many areas:

  • Benefit services: Includes hearings related to Medicaid program eligibility, services, and providers; food assistance; cash assistance; and hearings for adoption subsidy services;

  • Unemployment: Appeals referred by the Unemployment Insurance Agency related to worker benefit entitlement, employer liability, and identity fraud issues;

  • Licensing: Includes hearings referred by various agencies and bureaus such as the Liquor Control Commission; the Department of Insurance and Financial Services; the Michigan State Police and Michigan Commission on Law Enforcement Standards; the Bureau of Services for Blind Persons Business Enterprise Program Licensing; Corporations, Securities, and Commercial Licensing and Corporate Oversight; Health Care Professional Licensing; and Occupational Licensing;

  • Tax appeals: All Michigan tax issues including business and residential property and poverty disputes, principal residence and qualified agricultural exemption appeals, and other state tax issues4; and

  • Regulatory actions: Including issues originating with the Michigan Occupational Safety and Health Administration (worker safety issues); the Department of Education (special education, teacher tenure, nutrition, etc.); the Department of Environment, Great Lakes, and Energy (environmental issues); the Department of Insurance and Financial Services (financial and insurance matters); Transportation (traffic standards, road construction, etc.); the Public Service Commission (utilities and telecommunications); the Michigan Employment Relations Commission (unfair labor practices, public strikes, petitions for representation elections, etc.); the Department of Civil Rights; and others.5

With these being just a few of the case types handled by MOAHR, it is safe to say that many of the administrative adjudicatory processes handled in state government come through MOAHR’s door.

Before the pandemic, MOAHR conducted certain administrative hearings by remote means based on existing administrative rule authority to do so.6 For example, many unemployment and cash and food assistance appeal hearings were (and continue to be) held by telephone. Most administrative hearings were nonetheless traditionally held in person at MOAHR’s offices in Lansing, Detroit, Saginaw, and Traverse City — or at a branch office of the Michigan Department of Health and Human Services (for benefits hearings), a local school district (for education hearings), or a designated local government venue (for tax hearings.)

This all changed in March 2020, when Michigan confirmed the state’s first two COVID-19 cases and Governor Gretchen Whitmer declared a state of emergency. Thereafter, MOAHR swiftly established remote hearing capabilities for MOAHR’s 82 administrative law judges (ALJs) and Michigan Tax Tribunal members and telework capabilities for all staff so MOAHR’s operations could continue safely without interruption — and, importantly, Michigan residents, businesses, and companies could achieve resolution of disputes in a timely fashion and with due process.

MOAHR’s adaptation to remote hearings included developing processes to allow for review of documents and submission of exhibits and other filings entirely through electronic means, acquiring Zoom licenses, and ALJs learning new technologies and modified existing procedures to accommodate virtual hearings. This transition led to the creation of the MOAHR Remote Hearing Manual Workgroup consisting of four ALJs representing a broad range of case types within MOAHR and a final work product called “Standards and Guidelines for Remote Hearings”7, a 35-page manual containing useful information and best practices for all hearing participants using either Zoom or Microsoft Teams.8

In the end, MOAHR’s forced transition to remote technology for most proceedings has led to numerous benefits. These include increased accessibility, convenience, and time management for all parties and hearing attendees, including persons with disabilities who may have difficulty appearing in person; elimination of the need to secure transportation and take time off from work or away from child care responsibilities; reduced costs associated with travel and parking and the related reduced negative impact to the environment; and greater efficiencies for MOAHR and all parties in the increased number of cases adjudicated.9 For example, MOAHR closed a total of 55,964 cases in 2020 and will easily exceed this total in 2021, having already closed a total of 46,565 cases as of August 31st.10 These numbers establish the tangible efficiencies gained in a remote work environment while maintaining the tenets of procedural fairness and MOAHR’s underlying mission.

Similar benefits appear to have been realized at the trial court level; as of April 2021, Michigan trial courts had logged more than 3 million hours of Zoom hearings.11 A preliminary report authored by the State Court Administrator’s Office’s Lessons Learned Committee observed that despite “countless stories of frustration over technology and connectivity … universally, if not begrudgingly by some, the trial courts acknowledge Zoom provides for efficient and effective access to the courts for most hearings except extended evidentiary hearings and trials.”12 And according to the committee’s findings, 82% of nearly 1,500 attorneys surveyed indicated the desire for Zoom hearings to continue after the pandemic.13 In doing so, “these attorneys reported their clients appreciated Zoom for the convenience and time savings from not having to travel to the court, park, and personally attend a hearing.”14 In fact, “[c]lients also expressed they were less intimidated by the process on Zoom without losing respect for the procedure and decorum.”15 The report further indicated:

Zoom hearings will reduce the cost of litigation by reducing the billable hours normally associated with travel, waiting in court for hearings or completing settlement conferences, etc. This cost saving will be a benefit to the public that pays for legal services, as well as to members of the public who otherwise could not afford legal services and would be forced to handle a matter in pro per. Moreover, Zoom hearings (especially when scheduled for a specific time or window of time) have the additional benefit of allowing attorneys to more easily manage their calendar without the potential of being stuck in court all day.16

Although “attorneys were less enthusiastic about evidentiary hearings involving multiple days, witnesses, and exhibits,” the report noted that the “[u]se of Zoom in trials and lengthy evidentiary hearings creates greater flexibility to coordinate appearances by experts or other witnesses who would need to travel to court for an in-person hearing” — a benefit that may lessen the need for adjournments or rescheduling.17

Significantly absent from the committee’s findings was any indication by the trial courts, district courts, or attorneys surveyed that credibility determinations and the ability to evaluate a witness’s demeanor were any less effective in virtual hearings.18 This notion was reinforced in a recent study conducted by the Center for Legal and Court Technology on behalf of and with the support of the Administrative Conference of the United States.19 The purpose of the study was analyzing how federal adjudicatory agencies are using remote appearances and virtual hearings.20 According to the center, information gathered from interviews with senior adjudicators from 12 agencies “supports a conclusion that virtual hearings do not differ in result from in-person hearings.”21 For example, regarding judges’ ability to make credibility determinations from remote witnesses, “every adjudicator interviewed in this project reported the ability to adequately evaluate demeanor despite the use of videoconferencing.”22

However, recognizing that the primary legal question posed by remote appearances and hearings is that of constitutional due process, the study also asked, “Can a remote party fully participate in the virtual hearing so as to present all relevant evidence, adequately challenge adverse evidence, fully observe proceedings, make appropriate argument, and communicate effectively?”23 The data collected from adjudicators and other agency staff revealed the following answer:

The ordinary virtual hearing fully accords with due process requirements by providing participating persons with all of the rights and protective procedures present at in-person hearings (emphasis added). Note, however that in any specific case, special circumstances may raise due process issues. That would include a hearing with serious technology issues, such as substantial bandwidth or equipment failures. Further, the involvement of one or more people with conditions (disabilities) that interfere with the ability to fully use videoconferencing likely would necessitate an in-person hearing.24

Ultimately, the center provided several recommendations grounded in its findings, the first of which is that remote appearances and virtual administrative hearings should continue post pandemic “to the degree consistent with the agency’s goals and needs and, to a reasonable degree, that of the parties or claimants” and that “[o]bjections by counsel to virtual hearings merely because they are virtual should not be given substantial weight.”25 Instead, “[g]iven due process requirements, parties or claimants without adequate equipment, bandwidth, or technology competence should be afforded in-person hearings unless those deficiencies can be remedied adequately by the agency.”26

Consistent with the findings of SCAO’s Lessons Learned Committee and the Center for Legal and Court Technology, MOAHR’s transition to a virtual administrative courtroom has largely been well received by hearing participants but has not been without some technological challenges. Most are rooted in the complexity of the evidentiary hearing and the volume of the record, as is the case with certain licensing and regulatory hearings — for example, adjudication of Consumers Energy’s most recent electric rate case entailed six days of cross-examination held remotely using Microsoft Teams, a record consisting of almost 5,000 pages and hundreds of exhibits, and a proposal for decision that was more than 400 pages. Of equal significance, however, is the digital divide resulting from a lack of access to and/or a working understanding of the technology required for remote hearing participation, as is the case with some self-represented claimants or petitioners with cases scheduled for hearings before MOAHR.

These challenges notwithstanding, it would be counterintuitive for MOAHR not to harness and retain virtual practices that have improved the hearings system for parties, practitioners, and the public. MOAHR’s Administrative Standard 2021-1 endeavors to do so.27 This standard is premised on the realization that many proceedings can and should continue to be conducted remotely except in specific circumstances where it may not be possible or workable due to accessibility limitations, specific evidentiary issues, or other unique circumstances that preclude its effective use.

In ways both large and small, the pandemic has offered up teachable moments for rethinking traditional business models, including in the practice of law and in our judicial and administrative systems. Michigan Supreme Court Chief Justice Bridget M. McCormack observed that the pandemic “is not the disruption courts wanted, but it is the disruption courts needed.”28 It behooves us to embrace this opportunity to create long-term, lasting improvements to the administrative hearings process with service to the public and access to justice as our guideposts — and MOAHR is here for it.

1 Hammon, The Practice of Law During COVID-19, Law Practice Today (April 15, 2021) [https://perma.cc/YR39-ZR9Y]. All websites cited in this article were accessed November 4, 2021.

2 Id.

3 Michigan Office of Administrative Hearings and Rules, Mich Dep’t of Licensing and Regulatory Affairs [https://perma.cc/E26X-M93T].

4 Michigan Tax Tribunal (MTT) members adjudicate these tax appeals. Welcome to the Michigan Tax Tribunal, LARA Tax Tribunal, available at [https://perma.cc/VK6Z-R9CN].

5 Michigan Office of Administrative Hearings and Rules.

6 Rules 114(4) and 121 of the Michigan Administrative Hearing System Administrative Hearing Rules, Mich Admin Code, R 792.10114(4) and R 792.10121(1), authorize administrative law judges, hearing officers, and tax tribunal members to conduct prehearing conferences and hearings “by telephone, by videoconference, or other electronic means,” and Rule 121(2) further provides that “[a]ll substantive and procedural rights apply to all hearings under this rule.” These rules do not apply to proceedings before the Michigan Employment Relations Commission and the Public Service Commission. See Mich Admin Code, R 792.10101(3) and (4).

7 Standards and Guidelines for Remote Hearings, MOAHR (February 1, 2021), available at [https://perma.cc/F58B-BTTA].

8 The Michigan Tax Tribunal, located within MOAHR, also developed the MTT Video Guides for Participants, remote hearing manuals for participants appearing at videoconference hearings before the tribunal. MTT Video Guides for Participants, LARA Tax Tribunal, available at [https://perma.cc/JR2A-YQMR].

9 For example, see Michigan Trial Courts: Lessons Learned from the Pandemic of 2020-2021, Lessons Learned Comm, SCAO (June 29, 2021), pp 20-21, available at [https://perma.cc/PBN5-3T2Q].

10 MOAHR Scorecards, data.Michigan.gov [https://perma.cc/X87N-3HAS].

11 Michigan Trial Courts, p 3.

12 Id. at p 19.

13 Id. at p 20.

14 Id. at p 21.

15 Id.

16 Id. at p 23.

17 Id. at pp 21, 23.

18 Id. at pp 20-23.

19 Lederer, Analysis of Administrative Agency Adjudicatory Hearing Use of Remote Appearances and Virtual Hearings, The Center for Legal & Court Technology (June 3, 2021), available at [https://perma.cc/S48D-6NNU].

20 Id. at p 4.

21 Id. at p 5.

22 Id. at p 10.

23 Id. at p 13.

24 Id. at p 14.

25 Id. at p 18.

26 Id.

27 Administrative Hearing Standard No 2021-1: Administrative Law Judges, Hearing Officers, and Tax Tribunal Members to Conduct Proceedings Remotely with Limited Exceptions, directive from MOAHR Executive Director and Chief Regulatory Officer Suzanne Sonneborn (August 12, 2021), available at [https://perma.cc/P2ET-SLDC].

28 Michigan Trial Courts, p 18.